The U.S. government recently moved approximately 40,000 bitcoins, worth over $2 billion, to the Coinbase platform.
Bitcoin is up 44% year-to-date. While a total of 49,000 BTC were transferred from government wallet addresses, of which about 10,000 BTC went to the world’s leading exchange Coinbase.
A move that has sparked speculation that the government may be looking to liquidate its holdings as the crypto market hits local highs, it appears that most of the transfers are internal.
Blockchain security firm PeckShield just announced in a tweet on March 8 that BTC is among those seized in 2021 and 2022.
Between November 2021 and March 2022, the U.S. government seized approximately 51,351.9 BTC from Silk Road crime proceeds. According to PeckShield, the BTC occurred at two government addresses: bc1q5s…0ch and bc1q2ra…cx7 thus far. At the time, bitcoins was worth about $3.39 billion.
On the other hand, internal transfers are routine transactions that do not involve the sale of assets, but rather their redistribution within the organization. In the case of the U.S. government’s bitcoin holdings, it is likely that the transfers are part of the government’s regular management of its crypto holdings.
It should be noted that approximately 9,861 BTC seized from the Silk Road hacker were also sent to the Coinbase cluster. Silk Road was a notorious online black market that was shut down by the FBI in 2013. The seized bitcoins were auctioned off in 2014, and it is unclear why they were transferred to Coinbase.
Regardless of the government’s intentions, the decision has not had a significant impact on the crypto-market.
As of press time, bitcoin is trading at $22,005, showing virtually no reaction to the transfer.
While there was a slight drop in the price of BTC from $22,469 to $22,000 after the event, only about 10,000 BTC (~$217 million) went to Coinbase and were likely sold. This should not be of great concern since not all 49,000 Bitcoins were sold.
